25 point mantra
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discipline<br />
for day<br />
trading<br />
The success that a trader achieves in the<br />
markets is directly correlated to one’s<br />
trading discipline or lack thereof.<br />
Trading discipline is 90 percent of the<br />
game. The formula is very simple. Trade<br />
with discipline and you will succeed;<br />
trade without discipline and you will fail.<br />
the <strong>25</strong> <strong>point</strong> <strong>mantra</strong>
discipline<br />
for day trading<br />
A MUST READ<br />
You should read<br />
through these rules<br />
before the start of<br />
every single trading<br />
day!<br />
The <strong>25</strong> <strong>point</strong> <strong>mantra</strong><br />
The success that a trader achieves in the markets is directly<br />
correlated to one’s trading discipline or lack thereof. trading<br />
discipline is 90 percent of the game. The formula is very simple.<br />
Trade with discipline<br />
and you will succeed.<br />
Trade without<br />
discipline and you<br />
will fail.<br />
To succeed one<br />
must persist<br />
No matter what<br />
keep reading this<br />
article over and<br />
over again.<br />
1<br />
LEARN<br />
Read these rules over<br />
and over again to know<br />
them off by heart.<br />
2<br />
REPEAT<br />
Keep doing the same<br />
successful routine over<br />
and over again..<br />
3<br />
DISCIPLINE<br />
Practiced 100% of the<br />
time, every trade, every<br />
day, no matter what!<br />
Think of this as<br />
praying<br />
Remind yourself<br />
how to conduct<br />
yourself throughout<br />
the trading session.
“The Wheel of Success”<br />
There are three spokes that makeup what we<br />
call the “Wheel of Success” as it relates to<br />
trading. The 1st spoke is content. Content<br />
consists of the external and internal market<br />
information that traders utilise to make their<br />
trading decisions. All traders must purchase<br />
value-added content that provides utility in<br />
making their trading decisions.<br />
The most important type of content is internal market information (IMI) IMI simply is time and price<br />
information as disseminated by the exchanges. After all, we all make our trading decisions in the<br />
present tense based on time and price. In order to trade the markets effectively, we must have the<br />
most live and up-to-date time and price information seamlessly delivered to our PCs through a<br />
reliable execution platform and/or charting package. Without instantaneous time and price<br />
information, we would be trading in the dark.<br />
The 2nd spoke is mechanics. Mechanics is how you access the markets and the methodology that<br />
you employ to enter/exit your trades. You must master mechanics before you can enjoy any success<br />
as a trader. A simple keystroke error can result in a loss of thousands of dollars. A trader can ruin his<br />
entire day with an inadvertent trade entry error.<br />
Once you have mastered order execution, though, it is like riding a bike. The process of entering and<br />
exiting trades becomes seamless and mindless. fast and efficient trade execution, will enable you to<br />
hit a bid or take an offer before your competitors do. remember, the fastest survive.<br />
THE MOST IMPORTANT SPOKE IN THE WHEEL<br />
The 3rd and most important spoke in the Wheel of Success is<br />
discipline. You must attain discipline if you ever hope to achieve any<br />
level of trading success. trading discipline is practiced 100% of the<br />
time, every trade, every day.<br />
Review the following <strong>25</strong> Rules of trading discipline. You must<br />
condition yourself to behave with discipline over and over again.<br />
Many of our clients read through the rules every day before the<br />
trading session begins. It doesn’t take more than three minutes to<br />
read through them. Think of the exercise as praying, reminding you<br />
how to conduct yourself throughout the trading session.
THE MARKET PAYS YOU TO BE<br />
DISCIPLINED.<br />
Trading with discipline will put more money in your<br />
pocket and take less money out. The one constant truth<br />
concerning the markets is that:<br />
discipline = increased profits<br />
BE DISCIPLINED EVERY DAY, IN<br />
EVERY TRADE, AND THE MARKET<br />
WILL REWARD YOU, DON’T CLAIM<br />
TO BE DISCIPLINED IF YOU ARE<br />
NOT 100 PERCENT OF THE TIME..<br />
Being disciplined is of the upmost importance, but it’s<br />
not a something thing, like claiming you quit a bad<br />
habit, such as smoking. If you claim to quit smoking<br />
but you sneak a cigarette every once in a while, then<br />
you clearly have not quit smoking. If you trade with<br />
discipline nine out of ten trades, then you can’t claim<br />
to be a disciplined trader. It is the one undisciplined<br />
trade that will really hurt your overall performance<br />
for the day.<br />
Discipline must be practised on every trade.<br />
If you have a proven methodology but it doesn’t seem<br />
to be working in a given trading session, don’t go<br />
home that night and try to devise another one.<br />
TRADERCLIQ
ALWAYS LOWER YOUR TRADE SIZE<br />
WHEN YOU’RE TRADING POORLY.<br />
Being disciplined is of the upmost importance, but it’s<br />
not a something thing, like claiming you quit a bad<br />
habit, such as smoking. If you claim to quit smoking<br />
but you sneak a cigarette every once in a while, then<br />
you clearly have not quit smoking. If you trade with<br />
discipline nine out of ten trades, then you can’t claim to<br />
be a disciplined trader. It is the one undisciplined trade<br />
that will really hurt your overall performance for the<br />
day.<br />
Discipline must be practised on every trade.<br />
NEVER TURN A WINNER INTO A<br />
LOSER.<br />
Being disciplined is of the upmost importance, but it’s<br />
not a something thing, like claiming you quit a bad<br />
habit, such as smoking. If you claim to quit smoking<br />
but you sneak a cigarette every once in a while, then<br />
you clearly have not quit smoking. If you trade with<br />
discipline nine out of ten trades, then you can’t claim to<br />
be a disciplined trader. It is the one undisciplined trade<br />
that will really hurt your overall performance for the<br />
day.<br />
Don’t be greedy.<br />
TRADERCLIQ
YOUR BIGGEST LOSER CAN’T<br />
EXCEED YOUR BIGGEST WINNER.<br />
Keep a trade log of all your trades throughout the<br />
session. If, for example, you know that, so far, your<br />
biggest winner on a day is five e-Mini S&P <strong>point</strong>s, then<br />
do not allow a losing trade to exceed those five <strong>point</strong>s.<br />
If you do allow a loss to exceed your biggest gain then,<br />
effectively, what you have when you net out the biggest<br />
winner and biggest loss is a net loss on the two trades.<br />
NOT GOOD.<br />
THE FIRST LOSS IS THE BEST LOSS.<br />
Once you come to the realisation that your trade is no<br />
goodie’s best to exit immediately. “It’s never a loser<br />
until you get out” and “Not to worry, it’ll come back”<br />
were often said tongue in cheek, by trades in the pit<br />
back in the day. Once the phrase is stated, it is an<br />
affirmation that the trader realises that the trade is no<br />
good. It is not coming back and it is time to exit.<br />
TRADERCLIQ
BE YOURSELF. DON’T TRY TO BE<br />
SOMEONE ELSE.<br />
In all my years as a trader I have never traded more<br />
than a 50 lot on any individual trade. Sure, I would<br />
have liked to be able to trade like colleagues at the bank<br />
who were regularly trading 100 or 200 lots per trade.<br />
However, I didn’t possess the emotional or<br />
psychological skill set necessary to trade such big size.<br />
that’s OK. I knew that my comfort zone was somewhere<br />
between 10 and 20 lots pr trade. Typically, if I needed<br />
more than 20 lots, I would “butcher” the trade.<br />
Emotionally I could not handle that size. the rade<br />
would inevitably turn into a loser because I could not<br />
trade with the same talent level that I possessed with a<br />
10 lot. Learn to accept your comfort zone as it relates to<br />
trade size.<br />
You are who you are.<br />
YOU ALWAYS WANT TO BE ABLE TO<br />
COME BACK TO TRADE TOMORROW.<br />
NEVER put yourself in the precarious position of losing<br />
more money than you can afford. The worst feeling in<br />
the world is wanting to trade and not being able to do so<br />
because the equity in your account is too low and your<br />
brokerage firm will not allow you to continue unless you<br />
submit more funds. Set yourself a daily maximum<br />
downside limit on your performance. Once hit, turn off<br />
your PC and call it a day.<br />
You can always come back tomorrow.<br />
TRADERCLIQ
EARN THE RIGHT TO TRADE BIGGER.<br />
Too many new traders think that because they have<br />
$<strong>25</strong>,000 equity in their trading account that they<br />
somehow have the right to trade five or ten e-Mini S&P<br />
contracts. This cannot be further from the truth. If you<br />
can’t trade a one lot successfully, what makes you think<br />
that you have the right to trade a 10 10 lot?<br />
New traders should show a profitable ten-day period,<br />
then increase the trades up by one lot. Etc etc.<br />
Remember: if you are trading poorly with two lots you<br />
must lower your trade size down to a one lot.<br />
GET OUT OF YOUR LOSERS.<br />
You are not a “loser” because you have a losing trade<br />
on. You are, however, a loser if you do not get out of the<br />
losing trade once you recognise that the trade is no<br />
good. It’s amazing to me how accurate your gut is as a<br />
market indicator. If, in your gut, you have the idea that<br />
the trade inso good then it’s probably no good. time to<br />
exit.<br />
Every trader has losing trades throughout the session.<br />
A typical trade day for me consists of 33% losing trades,<br />
33% scratches, 33%winners. I exit my losers very<br />
quickly. They don’t cost me much. So, although I have<br />
either lost or scratched over 2/3 of my trades, I still go<br />
home a winner.<br />
TRADERCLIQ
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